Marc Andereesen, noted entrepreneur who created the Netscape browser, has announced a $300M VC fund focused on silicon valley technology companies.
Marc Andreessen, the entrepreneur who co-founded the first significant Web browser Netscape at 22, is moving on to his next profession: Venture Capitalism.
Andreessen (pictured left) with his long-time business partner, Ben Horowitz (right), have raised $300 million in fresh capital to form a firm they’ve called “Andreessen Horowitz.” They’ll invest the money in a way they say is more suitable to today’s needs. They’re particularly enthusiastic about investing in Silicon Valley, saying it is unparalleled in its software prowess.
First, they’re going to spray small amounts of their first fund — checks of around $50,000 to $100,000 — into between 60 and 80 early stage companies, on the belief that a new wave of startups building with inexpensive web tools can get by with less than $500,000 in total funding over the lifetime. They’ll team with other investors, including prolific Silicon Valley angel Ron Conway to support these companies, which will be comprise mainly a few engineers with little need for guidance. (Conway is in fact an investor in Andreessen Horowitz).
Next, they’ll invest between checks of several million dollars into 12 to 15 more advanced companies, which typical for venture capital firms. This is where the two will spend most of their money, and time, taking board seats (7 or 8 each) at these companies. Such companies need more help in management and in growing a company, Andreessen said. Only the best of the very early-stage companies they back would reach this phase.
Finally, they’ll invest checks of up to $50 million into two or three “late-stage” deals, Andreessen said.
The two met at Netscape, when Andreessen hired Horowitz (left) to join as a product manager at that early browser company from Lotus. Horowitz earlier had worked at Silicon Graphics, which at the time was considered one of the hottest companies in Silicon Valley. After Netscape was sold to AOL in a $10 billion deal in 2009, the two put in some time at AOL, and then another company, called Loudcloud, which eventually morphed into a company called Opsware, and sold in 2007 to HP for $1.7 billion. Until recently, Horowitz ran HP’s software division, where he managed 4,000 people. Andreessen, meanwhile, co-founded a company called Ning, which has raised more than $100 million. He is chairman there.
Notably, Andreessen sees most of the interesting action still happening in Silicon Valley, as opposed to other areas of the world, and says they’ll focus their investments there, though “not necessarily exclusively.” The firm will be based on Sand Hill Road, home of most big-name venture firms in Silicon Valley.
Andreessen told me an interview that the two have proven themselves as founders and company builders, and see themselves as “throwbacks to how venture capital firms got started in the 1960s and 1970s,” when entrepreneurs like Don Valentine and Tom Perkins with real experience running companies launched venerable venture firms like Sequoia Capital and Kleiner Perkins.
Andressen said they’ll invest in all of the “new” business model areas, including consumer internet, cloud computing and consumer electronics. He said they would also invest in “back-end” companies or those with less exposure to consumers, such as virtualization and cloud storage.
If you are a silicon valley based tech entrepreneur, this fund should be one of the first ones to consider. Marc and Ben add a huge amount of value and cred to your startup.